Plaintiff sanitary district appealed the order of the Superior Court of Monterey County (California), which found in favor of defendant construction contractor in sustaining a demurrer to the sanitary district’s complaint for indemnity without leave to amend.

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Overview

The sanitary district was held liable for the destruction of a third party’s celery crop, which occurred as the result of the construction contractor’s negligent performance of the construction contractor’s and sanitary district’s contract. The court reversed the lower court’s judgment, which dismissed the sanitary district’s indemnity complaint without leave to amend. The court held that the sanitary district stated a common law cause of action for indemnity. Specifically, the complaint alleged that the construction contractor negligently performed its contractual duties, which it had represented that it was capable of performing, and that the sanitary district detrimentally relied on the representations. Based on that, an implied indemnity agreement arose. Neither res judicata nor judicial notice applied because the construction contractor demurred, and courts refuse to take notice of other courts’ decisions absent unusual circumstances. The latter was not shown. Finally, the third party’s election to hold the sanitary district liable for its property damage did not preclude an indemnity action for the contractor’s departure from the contract’s specifications or its negligence.

Outcome

The court reversed the lower court’s judgment that sustained the construction contractor’s demurrer to the sanitary district’s indemnity complaint without leave to amend.